Andrew Laurie

Macdonald Realty Ltd.

Cell 604-815-1961

Office 604-898-1010

Email: andrew@squamishrealtor.ca

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Investors in BC residential real estate: Who are they?

At a glance (5 minute read)

  • British Columbia, Nova Scotia, and New Brunswick have the highest share of out-of-province and non-resident investors in residential real estate.
  • Residents aged 55 and older own a significant proportion of investment properties.
  • Established immigrants are overrepresented among investors, with higher property values but lower average income compared to Canadian-born investors.

In recent years, there’s been growing concern about the role of residential real estate investors in Canada.

While investors provide much-needed rental stock, they can also limit housing market access for first-time home buyers and contribute to rising house prices. [1]

Who are these investors in residential real estate?

A newly released Statistics Canada profile looks at the demographic characteristics of investors, including age, sex, and immigration status, and where they bought residential properties.

The study focuses on four provinces: British Columbia, Ontario, Nova Scotia, and New Brunswick in 2020 (most recent data) and was conducted by the Canadian Housing Statistics Branch of Statistics Canada.

Key findings

  • BC, Nova Scotia, and New Brunswick had the highest share of out-of-province investors and non-resident investors.
  • Residents aged 55 and older own a higher proportion of investment properties than other any age bracket.
  • Established immigrants – those who landed before 2010 – were overrepresented among investors relative to their share of the provincial populations.
  • Women represented half of all resident investors.

What is an investor?

Investor: is an owner of at least one residential property that is not used as their primary place of residence. This includes:

  • A business or government that owns at least one residential property, excluding Canadian non-profit organizations. These are known as a “business investor.”
  • A person who is not a current resident of Canada and is a residential property owner, referred to as a “non-resident investor”.
  • A person who lives outside the province where they own residential property, referred to as an “out-of-province investor” in the province of the non-principal residence.
  • A person who lives in the province and owns two or more residential properties, or owns a property with multiple residential units and does not occupy that property. These persons will be referred to as “in-province investors”.

Investor-occupants own a single property with multiple residential units. One unit is their primary place of residence. This includes owners of a house with a laneway unit or basement suite and owners of a duplex who live in one of the units.

Non-investors are owners who are not an investor or an investor-occupant. This category primarily includes owners of a single property that does not have multiple residential units who live in the province where their property is located. Canadian non-profit businesses are also included in this category.

Investor types across provinces

The rate of out-of-province investors by province:

  • Ontario (0.5%),
  • Manitoba (1.4%),
  • BC (2.7%),
  • New Brunswick (3.0%), and
  • Nova Scotia (3.8%). 

BC

  • The rate of investor-occupants in BC is 9.6%.
  • Higher rates of out-of-province investors were found in areas along the southern portion of the BC-Alberta border. For example, in Invermere, 40.9% of owners were out-of-province investors. In Radium Hot Springs the rate was 69.2%.
In BC, 61 per cent of investors with a recreational property profile (two properties in different regions) were likely to declare rental income compared to 35.4 per cent of those with a potential landlord profile (two properties in the same region) of three or more properties.

Established immigrants are investors at higher rates than Canadian-born residents

The share of home owners who are immigrants in each province corresponds closely to the share of immigrants in the overall provincial population.

In BC, immigrants in general and established immigrants were overrepresented among investors, relative to their share of the provincial population.

  • The assessed value of the property holdings of immigrant investors is higher than that of Canadian-born investors in all five provinces.
  • The average assessed value of immigrant investors’ total property holdings was $2,200,000 in BC compared with $1,610,000 for Canadian-born investors.
  • In BC, the average income of immigrant investors was lower than that of Canadian-born investors.
  • Canadian-born investors had an average individual income of $105,000, whereas immigrant investors had an average individual income of $80,000. 

The majority of investors are 55 and older

Residents aged 55 years and older were overrepresented among home owners relative to their share of the population.

Canadians younger than 35 were significantly underrepresented among investors relative to their share of the adult population (Chart 5).

This underrepresentation likely occurred because younger investors had fewer income-earning years, making it more difficult to accumulate the financial capital required for home ownership and real estate investment.

Men are overrepresented among investors with three or more properties

  • Women and men constituted a similar proportion of investors. Among resident investors, the proportion of investors who are male in BC is 50.2%.
  • Men were overrepresented among investors with three or more properties in the housing stock.
  • The average assessed value of investors’ real estate holdings was similar between men and women in all five provinces.

The average income of female investors was significantly less than that of male investors. This disparity was the largest in BC where the average income for male investors was $125,000 compared with $70,000 for female investors. 

There is a significant presence of investor-occupants in urban BC

In some expensive urban markets, densification has produced a high number of properties with multiple residential units, such as rental apartment buildings and condominium apartment towers.

While densification can take the form of large buildings, it also includes single-detached houses with secondary suites or laneway units, duplexes, and triplexes. This form of density produces high rates of investor-occupants (those who own a single property with multiple residential units and live in one of the units).

In the Vancouver CMA, 12.5 per cent of owners were investor-occupants. In Vancouver city, this proportion was 15.9 per cent.

Investor-occupants had average incomes that were similar to those of non-investors, but lower than investor incomes. In the Vancouver CMA, the average income for investor-occupants was $65,000, compared with $65,000 for non-investors and $100,000 for in-province investors.

The average assessed value of the properties owned by investor-occupants was higher than that for non-investors in BC.

In the Vancouver CMA, the properties of investor-occupants had an average assessed value 34.7 per cent higher than the properties of non-investors, while in Victoria they were six per cent higher.

Other Canadian Housing Statistics Branch releases have examined variations in the rates of:

These investor types are not detailed here.

Read the full report, A profile of residential real estate investors in 2020, released May 23, 2023.

[1] Allen, M.T., Rutherford, J., Rutherford, R., Yavas, A. (2018). Impact of Investors in Distressed Housing Markets. The Journal of Real Estate Finance and Economics. 56. Pp: 622-652.
 
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Strong sales push Metro Vancouver home prices past July rate
Home prices across all home types in Metro Vancouver1 rose again in July, as strong sales figures continue to push up against low levels of housing inventory in the region.

Sales

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home salesin the region totalled 2,455 in July 2023, a 28.9 per cent increase from the 1,904 sales recorded in July 2022. This was 15.6 per cent below the 10-year seasonal average (2,909).
"While sales remain about 15 per cent below the ten-year average, they are also up about 30 per cent year-over-year, which is not insignificant. Looking under the hood of these figures, it’s easy to see why sales are posting such a large year-over-year percentage increase. Last July marked the point when the Bank of Canada announced their ‘super-sized’ increase to the policy rate of one full per cent, catching buyers and sellers off guard, and putting a chill on market activity at that time."
Andrew Lis, REBGV director of economics and data analytics

Listings

There were 4,649 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in July 2023. This represents a 17 per cent increase compared to the 3,975 homes listed in July 2022. This was 5.2 per cent below the 10-year seasonal average (4,902).

The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 10,301, a four per cent decrease compared to July 2022 (10,734). This was 14.4 per cent below the 10-year seasonal average (12,039).

Sales-to-active listings ratio

Across all detached, attached and apartment property types, the sales-to-active listings ratio for July 2023 is 24.9 per cent. By property type, the ratio is 16.5 per cent for detached homes, 32 per cent for townhomes, and 30.6 per cent for apartments.

Analysis of the historical data suggests downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

By property type

“What’s interesting to see in the current market environment is that, while the Bank of Canada rate hike this July was only a quarter of a per cent, mortgage rates are now at the highest levels we’ve seen in Canada in over ten years,” Lis said.

“Yet despite borrowing costs being even higher than last July, sales activity surpassed the levels we saw last year, which I think says a lot about the strength of demand in our market and buyers’ ability to adapt to and qualify for higher borrowing costs.”

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,210,700. This represents a 0.5 per cent increase over July 2022 and a 0.6 per cent increase compared to June 2023.

Sales of detached homes in July 2023 reached 681, a 28.7 per cent increase from the 529 detached sales in July 2022. The benchmark price for a detached home is $2,012,900. This represents a 0.6 per cent increase from July 2022 and a 1.1 per cent increase compared to June 2023.

Sales of apartment homes reached 1,281 in July 2023, a 20.7 per cent increase compared to the 1,061 sales in July 2022. The benchmark price of an apartment home is $771,600. This represents a 2.6 per cent increase from July 2022 and a 0.6 per cent increase compared to June 2023.

Attached home sales in July 2023 totalled 466, a 53.3 per cent increase compared to the 304 sales in July 2022. The benchmark price of an attached home is $1,104,600. This represents a 1.2 per cent increase from July 2022 and a 0.5 per cent increase compared to June 2023.

Editor’s Note: Areas covered by the Real Estate Board of Greater Vancouver include: Bowen Island, Burnaby, Coquitlam, Maple Ridge, New Westminster, North Vancouver, Pitt Meadows, Port Coquitlam, Port Moody, Richmond, South Delta, Squamish, Sunshine Coast, Vancouver, West Vancouver, and Whistler.

2 REBGV is now including multifamily and land sales and listings in this monthly report. Previously, we only included detached, attached, and apartment sales, and these additional categories, which typically account for roughly one to two per cent of total MLS® activity per month, are being included for completeness in our reporting.

 
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The following letter was issued to The Vancouver Sun for publication earlier today:

 

Letter to the editor:

 

I am concerned about information presented in Lori Culbert’s March 19 article “Flipping on the rise, but still a small portion of sales.” The article listed the “top 10 most lucrative house flips.” Our analysis through the MLS® system found that seven of these ten homes were not “flipped,” but instead rebuilt and re-sold. In some cases, a laneway house was also added to the property.

 

The implication that these homes were re-sold as-is for a quick profit is false and it misleads your readers.

 

The Real Estate Board of Greater Vancouver, and the 12,500 REALTORS® we represent, encourage an open public discussion about today’s real estate market. We believe, however, that the information that informs this discussion must be presented factually and in proper context.

 

Yours truly,

 

Darcy McLeod

President

Real Estate Board of Greater Vancouver

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Real Estate Board of Greater Vancouver

January 5th 2016 

 

In a year when the number of homes listed for sale was below historical averages, actual home sales in Metro Vancouver set a new record.

 

The Real Estate Board of Greater Vancouver (REBGV) reports that 2015 home sales were the highest annual total in REBGV history. This was powered early in the year by four straight months with more than 4,000 sales a month from March to June, another first for REBGV.

 

Sales of detached, attached and apartment properties in 2015 reached 42,326, a 27.8 per cent increase from the 33,116 sales recorded in 2014, and a 48.4 per cent increase over the 28,524 residential sales in 2013.

 

The total number of homes listed for sale on the MLS® in 2015 ranked fifth in the last ten years, while the MLS® Home Price Index (HPI) saw double-digit year-over-year price increases.

 

The number of residential properties listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in 2015 reached 57,249. This is an increase of 2.1 per cent compared to the 56,066 properties listed in 2014 and an increase of 4.6 per cent compared to the 54,742 properties listed in 2013.

 

With sales-to-active-listings ratios above 25 per cent for 11 months in 2015, the Metro Vancouver market experienced seller’s market conditions for much of the year.

 

"Home buyers were active and motivated throughout 2015 despite the pressure on supply of homes on the market," Darcy McLeod, REBGV president said. "Housing markets typically experience quieter periods within a calendar year, but that wasn't the case in Metro Vancouver last year."

 

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver ends the year at $760,900. This represents an 18.9 per cent increase compared to December 2014.

    

“We often hear economists say that seller’s market conditions put upward pressure on home prices,” McLeod said. “That was certainly the case in 2015, with price increases ranging from 14 to 24 per cent depending on property type.”

    

December summary

Residential property sales in Greater Vancouver totalled 2,827 in December 2015, an increase of 33.6 per cent from the 2,116 sales recorded in December 2014 and a 19.8 per cent decline compared to November 2015 when 3,524 home sales occurred.

 

New listings for detached, attached and apartment properties in Greater Vancouver totalled 2,021 in December 2015. This represents a 7 per cent increase compared to the 1,888 units listed in December 2014 and a 40.4 per cent decline compared to November 2015 when 3,392 properties were listed.

 

The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 6,024, a 41.6 per cent decline compared to December 2014 and a 25.6 per cent decrease compared to November 2015.

 

Sales of detached properties in December 2015 reached 1,136, an increase of 36.4 per cent from the 833 detached sales recorded in December 2014. The benchmark price for detached properties increased 24.3 per cent from December 2014 to $1,248,600.

 

Sales of apartment properties reached 1,225 in December 2015, an increase of 34.3 per cent compared to the 912 sales in December 2014.The benchmark price of an apartment property increased 14 per cent from December 2014 to $436,200.

 

Attached property sales in December 2015 totalled 466, an increase of 25.6 per cent compared to the 371 sales in December 2014. The benchmark price of an attached unit increased 13.6 per cent from December 2014 to $543,700.

 

Download the complete stats package by clicking here.

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Katia Dmitrieva and Doug Alexander, Bloomberg News | January 23, 2015 | Last Updated: Jan 23 2:16 PM E

 

The Bank of Canada’s bid to stimulate a sluggish economy with a surprise rate cut is getting no help from the nation’s big banks.

With rate cut, sub-2% mortgages are coming to a bank near you

Bank of Canada

 

By this time next week, Canadians borrowing for a home might be looking at the lowest rates in the country’s history as a result of the Bank of Canada’s rate cut.

 

Toronto-Dominion Bank, Canada’s largest lender, says it has no plans to cut its prime rate to match the central bank’s move, keeping the rate linked to variable mortgages, car loans and other securities, at 3%. Other banks, including Royal Bank of Canada, are also holding off.


“Our decision not to change our prime rate at this time was carefully considered and is based on a number of factors, with the Bank of Canada’s overnight rate only being one of them,” spokesman Mohammed Nakhooda said in an e-mail statement.


The Bank of Canada unexpectedly lowered its overnight lending rate a quarter of a percentage point to 0.75% Wednesday as a plunge in the price of oil dims the outlook for the economy. Prime rates have traditionally moved in lock-step with the central bank’s benchmark level, though there’s been departures in the past.


“The question becomes: Is this going to raise the ire of the Bank of Canada or the government?” John Aiken, analyst at Barclays Plc, said in an interview Thursday. “If you’re doing this to stimulate the economy and it doesn’t flow through into the lending rates, then it does not have the same impact as what was intended.”

Canada’s big five banks last cut their prime rate in April 2009, when they cut to 2.25% from 2.5%, Bloomberg data show.


A spokesman for the Bank of Montreal declined to comment on whether the bank would move its prime rate and a Canadian Imperial Bank of Commerce spokesman didn’t respond to a request for comment. Andrew Chornenky, a spokesman for Bank of Nova Scotia said the bank will make an announcement “if there are any changes to report.”


‘Off Guard’


“I, like the others, were completely caught off guard Thursday,” Royal Bank of Canada Chief Executive Officer David McKay said in an interview. “I need to catch up with my team and digest what’s going on in the market and figure out what we’re going to do from here.”


The country’s banks loaned about 74% of total Canadian mortgages, according to the Bank of Canada’s data for the second quarter of 2013.


“The BOC was prompted to cut rates in order to improve the affordability of existing — very high — consumer debt loads as unemployment rises and as incomes stagnate,” Gabriel Dechaine, an analyst at Canaccord Genuity in Toronto, said in a note to clients. “In turn, we believe there will be regulatory pressure on the banks to cut their lending rates,” he said referring to the Bank of Canada and Department of Finance.


The Bank of Canada rate cut comes just months away from the start of the key spring market when activity typically jumps. Home prices have been rallying for at least the last decade in Canada’s largest cities. The average price of a house in Vancouver rose 67% since January 2005 to $638,500  in December. Toronto prices jumped 71% in the same period to $521,300, according to the Canadian Real Estate Association.


Oliver


Meanwhile, Federal Finance Minister Joe Oliver says he has no intention of pushing Canadian banks to follow the Bank of Canada’s lead and drop their rates.

For his part, Oliver says he won’t interfere with internal decisions of commercial banks.

He also says he has no current plans to introduce new rules for residential mortgages.

Oliver’s approach differs from that of his predecessor, Jim Flaherty, who called the Bank of Montreal in 2013 to express his disapproval of its decision to offer a special low rate.

“I do not intend to interfere with the day-to-day operations of the banks,” Oliver said in a statement Friday.


Spring Season


Five-year variable mortgage rates, which are tied to prime, are at 2.4% for the major banks, according to RateSpy.com, a mortgage rate search engine run by Robert McLister, who also has a mortgage brokerage. He thinks they could go below 2%.


“We haven’t seen that for a while,” McLister said by phone. “You’re going to see fixed rates under 2 1/2%, which has never happened. It’s going to certainly heat up the housing market more.”

Big 5 banks have a discretionary rate on five-year fixed term mortgages at 2.89%, according to the website. Five-year fixed rates currently average 4.79%, according to data compiled by Bloomberg.


The bank’s prime rates haven’t always moved in tandem with the central bank rate. In December 2008, the country’s lenders failed to immediately match the central bank’s cut. CIBC, Bank of Montreal, Royal Bank of Canada, Scotiabank, Toronto-Dominion Bank and National Bank of Canada all cut their prime rates by 50 basis points to 3.5%. That was less than the three- quarters of point rate cut from the Bank of Canada to 1.5%.

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Below are statistics for Squamish, comparing the real estate market for Decemer 2014 to November 2014 and December of the previous year. As you can see, inventory levels are lower, making it a Seller's Market. We do, however, expect more inventory to come on stream in the spring.

 

 

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